Forex Explained
24 hour market
Forex, or FX, trading occurs in a true 24-hour market. Unlike participants in more traditional financial markets, FX traders can respond to currency fluctuations caused by economic, political, and social events as they occur, without having to wait for a market to open. While conventional products are often subject to 'price gapping' while the market is closed, the FX universe is always trading.
Liquidity
The FX market is open 24 hours a day. It is the largest financial market in the world, with a daily average turnover of $2.3 trillion USD*. With such a huge market and no closing bell, FX is more liquid than almost any other financial market. Trading with CMC Markets gives you access to FX market liquidity through our experienced team of expert dealers. This exceptional liquidity means that you can have access to both tight dealing spreads and superior pricing. For example, any trade in a major liquid currency-whether it is for USD10,000 or USD10,000,000, will typically receive the same quoted price, a feature not always found in less liquid markets.
* as per Bank for International Settlements
Trade on 200:1 Margin
CMC Markets FX is traded on margin, allowing you to leverage your capital as much as 200:1 on the six major currency pairs listed below:
| FX | New Margin Requirements |
|---|---|
| EUR/USD | 0.5% |
| USD/JPY | 0.5% |
| USD/CHF | 0.5% |
| GBP/USD | 0.5% |
| AUS/USD | 0.5% |
| USD/CAD | 0.5% |
This is an efficient use of your capital because you are only allocating, in real dollars, a very small portion of the value of your position, while maintaining full exposure to the movement of the market. In effect, you are able to magnify the potential return on a given position. Remember though, while your profits can be magnified, your potential losses can be magnified too.
